Exclusive Interview With Scott Freeman, Biotech Investor and Former CMO of MindMed - PART II

Part II

MedicalGold

That makes sense. What are your thoughts on the state of the medical psychedelics sector? And how do you envision this sort of playing out over the next five to 10 years? Is this going to be a consolidation where there's going to be fewer companies 10 years from now or five years from now?

Or is it going to continue to be more biotech where you just have a lot of people trying to start up companies? What's your vision for how this is going to play out? And what's the opportunity for MindMed as it plays out?

Scott Freeman:

So, it's a good question. I'm not the best at predicting how companies are going to grow. But, the way I look at it is that in the next several years, when psychedelic drugs are going to get approved, they'll be on the market.

And I think that will expand financing. And when financing is expanded, there'll be more companies. I mean, I think that's a simple answer.

I think that from all the data I've seen, I really believe psychedelics are going to work. I really believe LSD is a good drug. It's going to work on a number of diseases. If you get a psychedelic on the market, I think it's a big market.

You have a big market, investors are going to invest in that. And, yeah, right now biotech's down, but there will be a revival. My guess is Biotech will stay down probably for a couple of years. I mean, the way cycles work.

A year or two ago, the market, in general, was down. Biotech, in general, is down. Right? It's going through a downturn cycle.

It's going to be hard to raise money in the next two to three years and you need it to survive. And you survive, but also make progress.

If you survive and make progress, and you get a drug on the market in four years, there is probably going to be an uptick, an upswing. And more investors are going to come in. Now they're going to invest in MindMed. Let's say MindMed does get a drug on the market, or whoever does, and their stock goes up a lot.

Are they going to put that money in that? They're probably not. But what's going to show is the paradigm that psychedelics can be turned into a drug is true, or it works. And when you turn it into a drug, it makes money, right?

So, are investors going to jump on a company that already has drugs on the market? One that is maybe a good investment that will steadily go up? A lot of investors, as you know, it's the 10 bangers. Right? It's not going to be 10 times the range.

So what are they going to look for? They're going to look for somebody who has a novel idea in the psychedelic market. And there's going to be other psychedelics that come out, along with interesting data. And I think they'll probably be looking for start-up companies. Like I said, don't do any investing based on my advice.

MedicalGold

What is your strategy as an investor both in MindMed and in biotech, in general? I assume that you're managing your own capital and what's your strategy? Are you highly concentrated in just a few companies that you really know, or have you diversified across the sector?

Scott Freeman:

I concentrate more on what I know because the sector's down. And like I said, my strength is not as an investor.

I mean, I'm really, really, really good at drug development. I'm not really, really good at investing. I can read data really well.

If I see a really good phase two, and I see phase three studies and I think investors are missing the boat on it. Yeah. I mean, I can do that. So, I have to be somewhat knowledge-based on what I know to invest in companies.

MedicalGold

All right. So let's talk about your history with MindMed and what prompted you to take this stake? I assume that you increased your holdings in a recent-

Scott Freeman:

No. Most of its founder shares.

MedicalGold

Ah, its founder shares. So it's subject to an escrow agreement?

Scott Freeman:

It was. The majority was unlocked recently. And the other people I'm with are mostly founders.

MedicalGold

I see. So simply put, you're doing this out of enlightened self-interest?

Scott Freeman:

Partly, yeah. I want it to succeed. If it succeeds, obviously, I will do well too. I mean, there's two parts of it. I'm a physician. I do these things to help patients. If I do it well, it helps me too. I obviously make a good living, but my main goal has always been to help patients and I do.

MedicalGold

What is your occupation or day job at this point in time?

Scott Freeman:

I do consulting in biotech. I work with people who want my expertise. The companies want my expertise.

MedicalGold

So you work with the industry, you don't work with investors in the industry?

Scott Freeman:

Correct. I have some things I'm developing myself that might work with investors. But I mostly do consulting.

But I don't necessarily go to an investment firm. It's either something I'm working on, like Savant. I started that and we licensed the drug. I mean, that was sort of, that's why I was a main shareholder in Savant, which translated to being a large shareholder in Mind Medicine.

So I mean, I like the development. Since I started in high school, it's what I've always wanted to do. I'm interested in science and medicine. And as I've said before, if I help patients, I'm going to help investors. I understand that in order to get this done, you need investors and obviously they need to make money. So I don't do it just for the investors to make money, I also do it for the patients. I guess it goes hand to hand.

When I was an academic, I was working for peanuts, so to speak. But I enjoyed it. I mean, I was doing basic and clinical research. So I've always done what I enjoy doing. I don't do it for the money. I've worked for very little money at times. And I've also been paid well, too. I mean, I just do what I enjoy doing and the rest sort of falls into place.

MedicalGold

Let's talk about MindMed and the plan, the six page plan. So to summarize, boil it down, essentially your plan is to cut MindMed's annual cash burn rate from $45 million to $24 million, and you'd like to see the board and management increase their holdings of MindMed shares to at least four times their annual compensation. That seems reasonable, and also it's a very good look for a company management to own shares and to have more skin in the game. I think investors always appreciate that, especially with open market purchases.

It seems to me that MindMed management has been excessively compensated, especially relative to the progress of the company and the share price performance. So all of these proposals are extremely reasonable, and make a lot of sense to me, as a shareholder. And I'm sure that makes a lot of sense to other shareholders too. Whether or not you're able to affect this change is a different story, but it sounds like some kind of change is coming.

Now, let's talk about actually the value generation aspect of it. So two key drugs, MM110 and MM120. Basically the earliest, it seems, that one of these can get FDA approval would probably be four years from now. Maybe you could speak to that timeline a little bit for people who are not as well versed in biotech and the three phase trials, and how it works, and the timeline involved. So tell us a little bit about the two drugs.

Scott Freeman:

The four years is if they adopt my plan and the FDA approves switching Phase 2b to phase three. Right.

MedicalGold

Okay. So tell us a little bit about that.

Scott Freeman:

Okay. So basically drug development works by first taking a drug into phase one, which is toxicity studies. Phase two is when you look for efficacy in a particular disease. Now there are smaller trials where it's hard to get statistical significance because of the small numbers of patients on it, but you get some sense that this looks like these patients are doing better, and how you define that.

Once you find that indication, then you do a large trial that's statistically powered to show efficacy. And that gets approved by the FDA. So that's basically a phase three trial. Typically, a phase one trial is a year and a half to three years, a phase two trial is two to three years, and a phase three trial is probably three to four years. That's the general scheme of things.

What you try to do in drug development is see if you can quicken that pace. And there are different ways to do it, like breakthrough designation that might allow you to use a phase two trial that shows some efficacy to get approval. To get approval with a commitment to do the big phase three afterwards and demonstrate the efficacy later.

There are different ways that you can work with the FDA, depending on the indication, and particularly it's an indication that we call an unmet medical need. Meaning there are patients suffering from a severe disease, a good example is let's say cancer. And you show some efficacy and you go to the FDA say, "Do you really want to withhold this now?" And this patient population, let's say, dying of cancer, really has no other drug. They've exhausted all the drugs that have been shown to be helpful. They have no other drug to take. It looks like, at least in early studies, this may be helpful. So give us approval and we'll go ahead and do the large study. And if the large study fails, the drug comes off the market, right? But at least you're getting the drugs to patients a little earlier for patients who have nothing else.

That's it. I mean, cancer's the more extreme case. You have some early, some phase two data that's not well powered or highly significant, but it looks good and they have nothing else. So because the FDA says, "Let's go on the market with this for now. Then you’re going to do this big study to prove or not prove that it works," but in the interim, they really have nothing else. So they're not losing anything. They're not taking anything away from them they could've taken.

MedicalGold

So help me to comprehend this a little better. So Phase 2b is a dose finding study, where you're trying to optimize the dosing. Is that correct?

Scott Freeman:

Yes

MedicalGold

So what would cause the FDA to say, "Well, with MM120, this is MindMed's LSD formulation, which I don't know exactly what separates it from LSD, but we can use these other-

So there's two other phase two studies already done for LSD on anxiety, both show positive effects-

Scott Freeman:

Three others.

MedicalGold

Three others. They all show positive effects. So we don't need to do another phase two, right?

Scott Freeman:

That's been my view for a number of years.

MedicalGold

Okay. Why did those other three studies not advance to phase three?

Scott Freeman:

They were done by Professor Liechti, who's in Basel. So he's a collaborator of ours. When we first founded MindMedicine, we said that we're doing psychedelic inspired medicines, which 18 MC is derived from Ibogaine, and Ibogaine is a psychedelic. The psychedelic effects were taken out and some of the other toxicities of Ibogaine, like cardiac disease and hypertension, were also taken out.

We had 18 MC, we started MindMedicine, we wanted to get into real psychedelics, right? And so we were looking over the field, and one of the early suggestions was psilocybin. The issue is that a lot of companies are working on psilocybin. And I personally think LSD is a better drug than psilocybin, although I don't have scientific data to convince you.

So, we said we wanted to do LSD, and as you're probably aware, investors don't like to invest in companies that don't have their drug on the market. Right? We looked around and said, "All right, who's working with LSD?" It turns out, LSD was discovered in Basel, Switzerland. And Basel is the home of Professor Liechti from the University of Basel, who has been working with LSD in clinical trials for more than 10 years.

So myself and JR, another co-founder, went and met with Professor Liechti, and we all still shared the same vision. He had a lot of untapped data in LSD, so his lab became a center of excellence for us.

We started the company in July or August of 2019, and by December we had early agreements with the Liechti Lab doing LSD studies, which we now own the intellectual property to. Within six months, we were in clinical trials with LSD.

MedicalGold

So MindMed owns the IP for one of those phase two LSD trials?

Scott Freeman:

We own all of the IP for all of the trials.

MedicalGold

Oh. So this seems like a no brainer to me. Why wouldn't the company be telling the FDA, "Hey, we think we can skip phase two B here. We could go straight to phase three."

Scott Freeman:

We started the conversation about Mind Medicine, and I can't go into the details, but we clearly had a different view in many aspects of clinical development from MindMed. And so that's been what I've been saying for probably two years.

This is not, like I said, the FDA could still say, no. I mean, I'm not guaranteeing that the FDA-

MedicalGold

Why would they say no?

Scott Freeman:

Well, why wouldn’t you do it?

MedicalGold

Those other three phase two trials were using the exact same compound, right?

Scott Freeman:

Yes, same LSD. Well, you randomize it, right. And Professor Liechti is critical and most of the studies are randomized. I mean, even small studies, because you want to be able to understand the effect you're having. So he is not just looking to hype LSD or try to get some results and say, "Hey, look, this patient did this so it must work." He's out there doing basically a randomized study. He wants to find out whether it works or not, not just get another grant or whatever. So he's a great investigator and he has a lot of data.

Now, could the FDA still say no? Yeah. But I mean, why wouldn't you go down and press this point and say, "Listen, just because Compass did a phase two B, it's a different company with a different data set. They probably had to do it because they probably didn't have untapped data in psilocybin, like we had with the professor Liechti." It's not just like the publications, we can get the raw data. That's what the FDA wants to see.

The exact data he did for those studies, all of it. The safety data, the efficacy data. And that's powerful because when you go to the FDA, you have to be able to show it, in what we call study reports.

MedicalGold

Let's talk about phase three. Let’s say the FDA says, "Okay, you can go straight to phase three with MM120." So what kind of a timeline are we looking at? How many patients do we need to have in this phase three study, and what exactly are we going to be studying? And what's the criteria for the patients? What kind of anxiety symptoms do they need to be experiencing to qualify, to participate? Just lots of questions about how this is going to look and how much it's going to cost and how long it's going to take.

Scott Freeman:

Yeah. So I'll give some top line because you're actually one of the first people actually asking the details. I haven't talked about it really with anybody. Neither MindMed or any investors, or actually any of my colleagues.

If you look at Professor Liechti's last randomized study with 40 patients, that's probably a good starting point. I mean, it defines patients with anxiety. It defines how you measure anxiety in the patient and defines what the differences were or what he saw that you need to see.

So I think that's a good guide to look at who the patients and how do you do a study? And that one is a randomized study, so I mean, I think that has a lot of valuable information. If this was two years ago and Mind Medicine had never gone to the FDA, I'd have 95% confidence that I could get this phase three. But they've already gone to the FDA before doing the phase two B and had conversations, which I have some whispers of what they were, but I don't know what they promised them.

Once you start promising the FDA stuff, it's hard to go back and say, "Hey, you know, I'd rather not think this way."

MedicalGold

Right.

Scott Freeman:

Now, it's a little more difficult, even if you have a really good case, because you've already been there and said things and muddied the water. They're probably going to look at it suspiciously like, 'Why are you back here? It's two years later, and you haven't enrolled a patient in your phase two B study, yet you're coming back to us and saying, "you want to change it." So that right away raises red flags.

The other thing about the FDA is that if they feel that you're sort of inexperienced, it may engender lack of confidence because it's like, "Okay, do these guys really know what they're doing? Do we really want them out there with a drug like LSD, using it? And maybe we really want to keep this tight and controlled."

So a bunch of issues, and I've thought those through in terms of when you re-approach them, how do you address those issues with them? Why are you here? You came down to us. I think they went down a year and a half ago, and in their shareholders meeting from 2021, they said they were going to complete this trial (Phase 2b) within two years. Now it's 15 months later.

MedicalGold

What's taken them so long?

Scott Freeman:

I don't know. Although they've come out and said they're going to get top line results in a year, I don't know how you enroll and get top line results in a year with a 200 patient trial. I think that's overly, overly, overly optimistic.

MedicalGold

So in your phase three, what's the dosage and what's the treatment schedule and how do we determine the efficacy?

Scott Freeman:

So again, it's a good question, and I don't want to put out exactly what my strategy is and how I would approach the FDA. But again, for the efficacy, it's probably going to be similar to the anxiety scales that were used in the Liechti trial.

MedicalGold

Is this a macro dose or a microdose of LSD?

Scott Freeman:

Macro. This is a quote, a full dose. I'm not quite sure yet how you define full dose, but it's a full dose. So all of his studies have been on in full doses. Mind Medicine is also working on a micro dosing study for ADHD. And so I think micro dosing also has a lot of value.

MedicalGold

So how does one prosecute the patent on lysergic acid diethylamide? And what sets MM120 apart from anything any other company has?

Scott Freeman:

The most valuable patent is composition matter. As you know, LSDs been around for 50 years, the structure's known, a lot of the effects are known. So you can't get composition of matter on LSD. So then the question is, what can you do?

Scott Freeman:

The good part of it is that millions of people have taken LSD, right? So you have a good sense of what the dose and toxicity is. And then you have Professor Liechti, who's been doing studies for the last decade with LSD, and he has data on toxicity and efficacy.

Scott Freeman:

There have been online surveys, which are not scientific, and I call them anecdotal data. You're going online and asking people to respond to how they've taken LSD for anxiety, for depression and they're giving their view on it. So it's anecdotal, but when enough people anecdotally tell you something, to tell you that this has helped me, it really, it peaks my interest. And then, you look at a lot of the work that Professor Liechti's done in a more controlled setting, you're seeing similar things.

And the same thing as with toxicity.I view LSD as one of the safest drugs. No one's ever overdosed from LSD. I view it as one of the safest drugs.

So the safety part of it is that, it is in the mind. If you take it and you trip, you may jump in front of a train, you may jump over a bridge, you may get into a car accident. I mean, you can think of a lot of ways that people have died from LSD, but it's not from end organ failure. And so LSD, from a physiological point of view, is safer than aspirin. Safer than Tylenol. I mean, if you take not even a lot of Tylenol, you probably take two times a dose, two times a dose, you can go into liver disease.

MedicalGold

So it's like this magical compound that's been known since the 1940s, but it's never been used in a pharmaceutical setting.

Scott Freeman:

That's the good news, right? We know a lot about LSD. You know the toxicity profile. I'm almost positive it's going to work in a disease. I mean, from all the data that's out there, both anecdotal and some clinical data from Profess Liechti.

Now the issue is how do you both make money for investors with patents? So the good news is that LSD has not been studied in a controlled academic setting or in industry settings. So when we start putting LSD, putting pills in people's mouths, new things emerge. There's PK data, there's safety data, there's efficacy data, and all that can be patented.

So it's not, again, it's not the gold standard, the best patent of a composition matter, but there is good patent potential. A lot of drug companies find a new target, they develop a drug to that target. Now they get composition of matter, but who knows whether that target's any good until you really get well into phase two, right. We pretty much know LSD is a good drug. Without getting into phase two, phase three, whatever I mean, to me, it's pretty clear LSD is going to work.

MedicalGold

The probabilities are pretty high that LSD is effective for anxiety and other mental health issues.

Scott Freeman:

Yeah.

MedicalGold

Okay. So let's wrap up the MM120 conversation. Tell me how, sort of the timeline of phase three, what you think the ballpark cost is, and then what is the market opportunity for this? Like how, realistically, how much revenue can this generate for MindMed investors?

Scott Freeman:

So I'm not the commercial person. My understanding is that the anxiety market's fairly large.

MedicalGold

Well, everybody takes Xanax, right?

Scott Freeman:

So, I mean, I don't want to put a number on it,  I don't know the number, but usually I would say at least $500 million to a billion. I mean, at the peak sales type thing, is the way I would just, off the cuff here, look at this. Although, like I said, I haven't done a market analysis, but I think it's a fairly large market, is the way I would look at it. And the cost of, and I really haven't done all the numbers with the FDA, so I'd rather not put out the cost of a Phase 3 trial.

MedicalGold

Well, what does a typical phase three trial cost?

Scott Freeman:

Depending on how many patients, it's probably $60 million to $100 million. So phase three is usually somewhere between, let's say, 250 patients to, let's say, a thousand. If you look at the Liechti data, I think there's a very, even with small numbers, some statistical positivity. So I think it's probably going to be on the lower end of that as opposed to the higher end, would be my guess. But again, I haven't really sat down yet with... usually when I know what the... pretty much what I think the studies design should be, when I have that, I usually sit down with sort of the statisticians and other experts, like Professor Liechti, and sort of go through all the details. I mean, his phase two trials, to get a sense of how many patients you need to assure yourself that you can get a positive phase three, right?

So he has three studies, I think. I think there are two that have 12 patients and one that has 40 patients, and looking at that, the statisticians can look at the spread, what the outcome is and what the confidence intervals are, and start looking at how many patients do the phase three to be well above those confidence intervals, so you're fairly certain that you get a positive result.

Scott Freeman:

That's sort of my next step. That would be my next step of planning. I have a good idea of how I would approach the FDA and what phase three would look like, but you really need to sit down with, I think both Professor Liechti and the statisticians. How do you overcome that and how many patients do you need? But my guess is it's going to be on the lower side than the higher side.

MedicalGold

Turning to MM110, so this is a little more opaque. So this is for opiate addiction, and MindMed completed a phase one that took a hell of a long time to complete. And the point you make is that they studied basically only for the detox phase, so the initial week coming off of opiates. But you would prefer to see, MM110 studied to treat opioid addiction as a whole over a much larger or longer timeframe. Can you talk about that?

Scott Freeman:

Yeah. So I mean, if you look at smoking cessation studies, like the nicotine addiction, that goes, I believe, at least 14 to 30 days, if not longer. So to treat addiction, you usually have to give a longer term dose, depending on how you define longer term, but it's at least 14 days. It's probably more in the 30 day range, if not even 60 days. And that's the same thing, I think, with opioid addiction. I think my view's always been that you probably need 30 days, maybe even 60 days to treat opioid addiction. The studies actually, opioid addiction studies go, usually go six months. Three to six months. So often, you treat it for one or two months and get a three month look, and then a six month look. I haven't looked at those studies in a while, but I think it's a  lack of opioid in the urine at, I believe, at six months.

So yeah, if you normally have six months that you have to keep them off opioids for six months, I don't think you can be able to treat the seven days and then a seven day treatment is going to affect the patient for six months. So I view it more as a one month or two month treatment. For opioid withdrawal, we do believe that 18 MC can affect the symptoms of opioid withdrawal. Opioid withdrawal is a seven day withdrawal period. And so a seven day dose will treat opioid withdrawal. Now, if you're going for a 30 day dose along the way, you're going to find a seven day dose.

So it makes sense if you're going for a 30 day dose, if you get the seven day dose early, to maybe look at opioid withdrawal symptoms, you might be able to get ... in effect, that might be able to get you on the market earlier, although there's several other drugs they use for opioid withdrawal symptoms. But getting on the market earlier could be helpful.

MedicalGold

There are already drugs on the market for that seven day period of the acute withdrawals to symptoms. It would make much more sense to have a marketable drug that could serve the patient for the entire two to three month period, or however long it takes them to totally snap the addiction. Right?

Scott Freeman:

Correct.

MedicalGold

So you want them to redo phase one or you want them to do phase two? Does MindMed have to redo phase one if they're going to do more than seven days?

Scott Freeman:

They need to expand it, right? You already have, knowing a seven day dose can help you understand where a 30 day dose is. I mean, often, obviously, as you treat longer, you need to drop the dose a bit. Right. And it depends on what the toxicities are. So I think you have a good start to understanding what the 30 day dose would look like, we have 110 patients on this study.

MedicalGold

Okay. And obviously that market is pretty massive as well. I mean, that would be even larger-

Scott Freeman:

That's a huge market.

MedicalGold

So that makes a lot of sense. And that would also not be a composition of matter patent, right? That would be a usage patent.

Scott Freeman:

Yes. Yeah. That'd probably be a usage patent.

MedicalGold

Okay. And now, let's talk about health mode. So they made this weird acquisition for digital health seem like a very in Vogue thing in 2020 and 2021, and you just don't really see how it ties in to MindMed's core competency, or how this is going to be monetized. Is that what you're saying?

Scott Freeman:

Yes. I mean, digital medicine is important, and important with psychedelics because basically patients are going for, let's say one dose or two doses to the clinic, and the rest of the time they're home. And so being able to monitor them at home is important. Obviously, the issue is this isn't a core competency for Mind Medicine.

So to the extent, if there's a couple of apps they're working on that will directly help at the LSD trials and the other trials, I mean, that might be worth continuing. But to make a sort of full blown digital health group, that seems to be away from the core. I mean, you have to stick to what you're good at. It's enough money to develop drugs.

Not that I don't think it's important, but I don't think the market for these things, like, let's say getting drug approved is equivalent. So I think it's more of a lack of focus, distraction. I think it's important. I think you can do it. You can contract to companies who are doing it. I think if there's some particular technology that's needed for these studies that they're working on, that might be worth doing, but I don't think, as you know, right now it looks like they have, I don't know, six trials ongoing or developing six trials. It just seems like a lot. And I've never seen a line item with how much they're really spending on this. I mean, the financials don't line item it out. And so that's curious that you can't really put together what this costs, and I'm assuming it costs more than we think.

MedicalGold

Right. So to sort of wrap it up, you are willing to join the board and even serve as chief medical officer.

Scott Freeman:

Yeah. So on that point, let me just clear it up. I mean, there's a chief medical officer there. I'm not necessarily looking to replace anybody, but if we decrease digital medicine, which he's been a big component of, he may not stay. I mean, if he chooses to stay and say, "Hey, I'm on board with the new plan and we're going to decrease this," yeah, that's fine. I mean, I don't need to be chief medical officer, but of course I would need to be involved in the clinical development programs, as a board member.

MedicalGold

Okay. And so you're not, you don't need any compensation, you don't even need stock options. So if they agree to this plan or you compromise on some compromise of a similar plan, and you become a board member, that means that you're in this for the long haul, and if you decided to sell your shares, you'd have to do a filing.

Scott Freeman:

So I do not intend to sell my shares. I see long term value in the company and I don't plan to sell my shares.

MedicalGold

Will you purchase more shares?

Scott Freeman:

I might. I haven't. I haven't. I mean, that's been something I've been thinking about, particularly at these prices, but I'm not selling. And we've gone through this, as you know, recently with Game Stop and Bed Bath and Beyond, where the major shareholder just sold his stake in Bed, Bath and Beyond. So I want to make sure that it's clear that I'm not, and I've gotten questions from others, picking up in the Reddit community about this being a pump and dump. I'm not just looking to get the stock price up to exit. And the answer's no. I see significant value in MindMed when my plan's implemented. I think LSD on the market is a huge value enhancer. Why would I want to sell?

MedicalGold

So, yeah. So that leaves me with two more questions. I mean, this is obviously a very difficult question to answer, and it's what I've been trying to wrap my head around. What might the medical psychedelics sector look like in five years? Five or six years. When maybe there's one or two approved drugs on the market and what's the ... Is MindMed one day going to be Pfizer, or anything close to Pfizer? How does this affect the pharmaceutical industry? I mean, if, MM110 and MM120 eventually are FDA approved and they prove to be highly effective for multiple indications, how does this affect big pharma?

Scott Freeman:

So I do think big pharma's going to, as this field matures, come in. And it's sort of interesting, when I first started in biotech, I thought, "Hey, if I was big pharma, I would buy up 30 small biotechs, I don't know, when they're 50 million a piece, or whatever, and wait for three or four, whoever comes out and wins, and gets out there. And I thought it was a cheap way to do it. Well, of course, I'm not the best at figuring out financially how to make money, how large companies should make money in biotech. But in reality, what happens is large pharma waits. They wait to see a winner. And when they see a winner, they pay a premium. It's the way it works. And the more I think about it, maybe it is a smart way to do it. When they see the winner, they're willing to step in and pay a 50% premium. They’re willing to pay up for a high degree of certainty once they have the data in hand.

MedicalGold

Right. We see this over and over again in biotech with blockbuster acquisitions.

Scott Freeman:

So I think that, and already, with Compass, it seems that Otuka, I think they have a small stake, and one of their former employees is now CEO. So, I mean, it seems that at some point Compass, if they become successful, could be bought by Otuka. I mean, and I think that's the way this partly plays out.

Scott Freeman:

Does MindMedicine stay independent? I don't know. I mean, I always say that even when I started Savant, all avenues are open. It's what's the best deal. What a really good deal. Right? So sometimes when we started Savant, we'd say, "Hey, what would you sell for today? Suppose somebody came in and offered you, what would you take now?" I think it's the same thing with, at Mind Medicine, that maybe quote merger opportunities, stay independent and try to grow, have a larger company take a position to eventually buy you. I think for the investors, you always need to be figuring out or willing to accept a good deal. If you go in saying, "Hey, I'm not taking a deal unless I'm CEO," that sort of doesn't help anybody.

So I think you always have to evaluate the deals and figure out what you think is a really good deal at the time. And if it is, probably take it. Take what you can, because as you know, things change, right. Data changes, market change and everything else. So I can't, right now, tell you, I mean, tell you exactly what's going to happen in the future, but I can tell you that I think as the market grows and this company's become successful, big pharma will step in at some point. Now, the question is, at that point, does Mind Medicine want to partner with a big pharma or not, probably would. They want to partner in a way that they can get bought.

So I think, right now, the point is we need to maximize or unlock the value in MindMedicine. Not unlocking that right now, particularly in these capital markets, it's conserve cash, focus on your key assets, and move things to market as quickly as possible. The rest, if you do that, the rest will work itself out. The value will be unlocked. There'll be different potential opportunities, either partnering with big pharma or raising money in the capital markets and staying independent or a combination. I'm not worried about what happens when you're successful but rather what happens when you're not successful.

MedicalGold

So if they do not accept your plan and you can't make much progress, where does that leave you, as a shareholder?

Scott Freeman:

So this is all the way at the end. I mean, we have different options, right? I mean, we can take it to a shareholder vote. I mean, there are different ways, but if it goes all the way to the point where I just say, "I give up," right? "I'm not, whatever, all my options are exhausted. This plan's not going to be taken and I'm out," I'm certainly not guaranteeing anybody I'm locking up my shares. I mean, right now, if I go back with the plan,  I lock up my shares. If that doesn't happen and all options are exhausted, all those options are and the plan's not accepted, and I'm not on the board. I can just tell you, one thing I am guaranteeing you is I'm not locking up my shares. What I actually do with them, I don't know. I can't tell you that right now, but I can tell you that I have no commitment. I'm not making commitments to investors, unless they back my plan. But if enough investors back my plan, it's going to have to be accepted.

MedicalGold

Okay.

Scott Freeman:

Right. So, I'm willing to commit to those investments and say, " I'm going to stick with it and I'm going to lock up. And you guys will basically ... Even when I was founder of Savant, even founder MindMedicine, the investors, I was locked up for several years. The investors got the first exit, which is rightfully so, because they're putting money on, saying it's sort of a similar game now. But if you don't support the plan and you don't back me then no, I'm not.

MedicalGold

So final question, I may or may not put this in the final transcript, but what's your thoughts on how medical psychedelic shakes out? Like what are the verticals, the different verticals that will be monetizable? I mean, obviously you could have a physical location, like a clinic, to treat patients just with therapists or doctors, sort of like we have the ketamine angle right now for anxiety, depression, PTSD. And then, obviously we have the FDA approved drug angle. And then maybe we even have looking at people's DNA for people that might be contraindicated to use certain psychedelic compounds and might be more beneficial for them to use others. What are your thoughts on all that?

Scott Freeman:

So I think it depends on, obviously, the drug. So one thing that I've always wondered about with psilocybin is that, as you know, magic mushrooms are getting approved by states, et cetera. And is Compass just developing a dose, a general dose for psilocybin, so I think their dose is 25 milligrams. So let's say they show it works in depression, they're probably going to charge five grand of treatment for, let's say, two treatments. Somewhere in that range, let's say.

Scott Freeman:

So why can't you just go to a clinic, or even at your home, and you can get magic mushrooms, probably 25 milligrams for like $50.

So psilocybin has been somewhat confused with, I think there is a market out there, but I think it's easier to undercut that. Again, you gain back the patents, right? And yeah, there's some patents on these psilocybin, but there are other forms of psilocybin, like magic mushrooms.

LSD's different, obviously. It's synthetic, so it has to come from someplace. So that's probably a little more like a, quote, drug. I know I've looked at Mind Medicine's website involved with it, and they have a supposedly novel MDMA that's supposedly less toxic.

MedicalGold

Right. Well, what do you think the prospect of legalization does?  Is this going to be similar to cannabis, where once it was legalized in Canada, the whole sort of allure sort of fell apart. I mean, obviously it was still a pretty big industry, but there was the black market because people didn't switch their habits and still bought weed from their dealer.

Scott Freeman:

Yeah. I don't think the allure's going to go away, and I think  LSD is not going to be legalized. I think magic mushrooms could. I don't think things like LSD, MDMA, or other psychedelics will be legalized, as we discussed, LSD is very safe, at least physiologically and MDMA is not, right. It has cardiac and hypertension effects.

So MDMA and DMT are different. I mean, there's these other psychedelics that don't fall into, quote, the safe physiological category. So that's one, that's a big part of it too. So will magic mushrooms get legalized? I believe they will. Will that affect Compass and psilocybin market? I believe that will. Will it affect the whole psychedelic market? I believe it won't.

MedicalGold

All right. Well, thanks a lot for your time Scott. I love your ideas to improve MindMed and maximize shareholder value. I think I will pick up some more shares on the open market once things calm down a bit.

Disclosure

Author owns shares of MindMed at the time of publishing and may choose to buy or sell at any time without notice.